Over 75s continue to experience higher inflation

As inflation falls for the population as a whole, the over 65s continue to experience inflation significantly higher at 2.5% compared to the national CPI inflation figure of 2.1%.

Over 75s continue to experience higher inflation

Saga Flash Inflation indices – November 2013 bulletin

"Our research shows that over 65s continue to experience signficantly higher inflation than other age groups standing at 2.5% compared with 2.1% for the populuation as a whole. This gap is likely to widen further as fuel prices increase and put further pressure on this age group who spend a greater proportion of their expenditure on heating their homes".

Key points:

Consumer Price Index (CPI) annual inflation was 2.1% in November, down from 2.2% in October 2013.

The largest downward contribution to the CPI inflation rate came from food and utilities.

Given that expenditure patterns vary across households, experienced inflation rates will differ across age-bands. We calculate that annual consumer price index (CPI) inflation was as follows for the over 50s age bands in November 2013 (October 2013 figures in brackets):

50-64: 1.9%(2.1%)

65-74: 1.9%(2.0%)

75 and over: 2.3%(2.5%)

We calculate that annual retail price index (RPI) inflation was as follows for the over 50s age bands in November 2013 (October 2013 figures in brackets):

50-64: 2.3% (2.3%)

65-74: 2.3% (2.4%)

75 and over: 2.4% (2.5%)

Figures 1 and 2 illustrate the annual rates of inflation for the over 50s. Annual CPI-based inflation is lower for 50-64 and 65-74 age bracket. This largely reflects an easing of annual food price inflation, which fell to its lowest rate in over a year in November. The rate of inflation faced by the over-75s remained higher than the national average, as other factors, such as rising utility costs, held up inflation.

Between September 2007 - when the financial crisis started to really get underway - and November 2013, the cost of living has risen substantially more for the over-50s than for the overall population on the broad-based RPI measure of prices. While younger age groups benefitted greatly from falling mortgage interest payments as the Bank of England cut interest rates during the recession, older age groups – who had largely or entirely paid off their mortgages – in general failed to benefit from this. Compared with September 2007, living costs have risen for different age bands as follows: